A couple will retire in 40 years; they plan to spend about $29,000 a year in retirement, which should last about 20 years. They believe that they can earn 9% interest on retirement savings. But now assume that the inflation rate over the next 40 years will average 4.9%.

a.	What is the real annual savings the couple must set aside? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Real annual savings

$

b.	How much do they need to save in nominal terms in the first year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Nominal savings in first year

$

c.	How much do they need to save in nominal terms in the last year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Nominal savings in last year

$

d.	What will be their nominal expenditures in the first year of retirement? The last? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Nominal Expenditures
First year	$
Last year